The US Federal Reserve is more concerned about deflation than inflation, Wendy Edelberg, a Fed economist, said yesterday at a conference in Beijing. She added that this was her own opinion.
The Fed is “very worried about real interest rates being too high,” she told the Global Think Tanks Summit. The monetary authority “would be thrilled if right now the worry that it had was really inflation, and if it were really worried about seeing signs that the economy was about to be growing much faster than its potential growth rate.”
The Fed refrained on June 25 from lifting its target rate for overnight loans between banks, having kept it at zero to 0.25 percent since Dec. 16. It also kept unchanged the size of its asset-purchase programs after more than doubling the assets on its balance sheet to US$2.1 trillion during the past year, expanding bank reserves and beginning lending programs to bolster the financial system.
The Fed’s balance sheet is already starting to come down as those lending facilities are no longer as “attractive,” Edelberg also said, attempting to ease worries about the Fed’s “‘exit strategy” for its fiscal and monetary stimulus measures. The US economy is still “grim” even if there are stabilizing signs in other economies around the world, she said.
US Treasuries fell this year as the global financial crisis abated and the US government began selling a record amount of debt to fund stimulus spending and bank rescues. The yield on the 10-year note rose in the past two months 35 basis points, or 0.35 percentage point, to 3.5 percent yesterday, according to data compiled by Bloomberg.
Risk premiums, rather than inflationary concerns, have caused recent gains in long-term interest rates, Edelberg said.
“Investors are rediscovering their appetite for risk and they are getting out of Treasuries into other kinds of investments,” she said.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Advanced Micro Devices Inc (AMD) suffered its biggest stock decline in more than a month after the company unveiled new artificial intelligence (AI) chips, but did not provide hoped-for information on customers or financial performance. The stock slid 4 percent to US$164.18 on Thursday, the biggest single-day drop since Sept. 3. Shares of the company remain up 11 percent this year. AMD has emerged as the biggest contender to Nvidia Corp in the lucrative market of AI processors. The company’s latest chips would exceed some capabilities of its rival, AMD chief executive officer Lisa Su (蘇姿丰) said at an event hosted by
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
NEXT GENERATION: The new 3-nanometer chip has 28 percent more transistors and offers up to 80 percent faster language model performance than its predecessor MediaTek Inc (聯發科) on Wednesday launched a new flagship smartphone chip, Dimensity 9400, made with Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) enhanced 3-nanometer technology, aiming to bring more artificial intelligence (AI) applications to edge devices like phones. The Dimensity 9400 is the second smartphone chip using TSMC’s second-generation 3-nanometer technology, after Apple Inc’s A18 Pro chip for the new iPhone 16 series. The new mobile chip has 28 percent more transistors, offers up to 80 percent faster large language model performance and is up to 35 percent more power-efficient than its predecessor, Dimensity 9300, MediaTek said. Chinese smartphone makers Xiaomi Corp (小米),
RSS